Will Oregon’s statistical study justify state-sponsored race discrimination?

March 10, 2015 | By RALPH KASARDA


The last time the Oregon Department of Transportation (ODOT) asked highway construction contractors to comment on its race-conscious affirmative action contracting program, the response was uniform condemnation.  Male and female general contractors and subcontractors of all races criticized ODOT’s program, which encouraged general contractors to prefer subcontractors of certain races, while disfavoring others.  Did ODOT stop its race-based program after those comments were submitted in 2011?  No.

Now, four years later, ODOT has asked a private consulting firm to conduct another study of the Oregon highway construction industry to justify the continuing use of race.  So attorneys from PLF teamed up with the Center for Equal Opportunity to submit these public comments encouraging ODOT to abandon racial preferences.

As a condition of taking federal highway funds, ODOT implements the notorious Federal Disadvantaged Business Enterprise (DBE) Program.  A DBE is defined as a small business owned and controlled by one or more individuals who are socially and economically disadvantaged.  Minority and women contractors receive preferential treatment under the program because they are presumed to be socially and economically disadvantaged – even if they are millionaires.  A firm can be certified as a DBE as long as the net worth of the firm’s owner, not including the value of his or her home, is less than $1.32 million.

The DBE Program works by requiring general contractors to hire a certain percentage of DBE subcontractors or demonstrate “good faith efforts” to do so.  Otherwise a state may reject the prime contractor’s bid for a highway construction contract, even if it is the lowest bid.  ODOT adds a twist to the way it implements the program.  ODOT makes general contractors grant racial preferences only to DBEs owned by African Americans or Subcontinent Asian Americans, but not to DBEs owned by Hispanic Americans, Native Americans, Asian Pacific Americans, or whites.  ODOT believes that firms owned by African Americans and Subcontinent Asian Americans face discriminatory barriers in the Oregon highway construction industry, but not firms owned by individuals of any other race.  This belief is based solely on statistics, and the barriers unique to individuals from these two races are undefined and unidentified.

And now you understand why contractors condemned ODOT’s program in 2011.  According to page 7-13 of ODOT’s 2011 Disparity Study Update, contractors of all races “did not think that [ODOT’s] policy was fair, that it pitted groups against each other, that there were not enough Asian and African American companies to meet the goals, and the same few vendors are getting the dollars all the time.”  Because contractors only got credit for hiring African Americans and Asian American subcontractors, ODOT’s program encouraged contractors to discriminate against subcontractors of every other race.  General contractors complained that there were too few African Americans and Asian-owned firms outside of the Portland area, so they could not meet the rase-based subcontracting goals when working on projects in other parts of the state.  Back then, ODOT gave preferences to all Asian American contractors, but its program now prefers only Subcontinent Asian Americans.

PLF and CEO believe that ODOT’s DBE program should be completely race-neutral.  Public contracting can be made completely transparent.  The process for prime contracts is already transparent.  Oregon publicly awards prime contracts only to the lowest bidder – thus eliminating any discrimination at that level of contracting.  The subcontracting process could be made transparent as well, thus allowing ODOT and its regional offices to detect and remedy discrimination without divisive racial policies.